IFRS Statement

Tullow Oil PLC
23 August 2005


                       Restatement of 2004 Results under
                  International Financial Reporting Standards


Restatement of 2004 Results under IFRS


23 August, 2005 - Tullow Oil plc (Tullow) today announces the impact of the
transition to International Financial Reporting Standards (IFRS) on the Group's
2004 results, for both the full year and the half year, with explanations as to
what adjustments have been made and the likely future impacts of these new
reporting standards. Previously the Group prepared its financial statements
under UK Generally Accepted Accounting Principles (UK GAAP).

As reported in the 2004 Annual Report and in accordance with EU regulations, the
Group will adopt IFRS with effect from 1 January 2005. The Group will report
under IFRS for the first time at its Interim Results for the six months ended 30
June 2005, to be announced on September 14 2005.  The first full year results to
be reported under IFRS will be for the year ended 31 December 2005. These
interim and final results will include as comparatives, the restatements under
IFRS published today, provided there are no significant changes to the Standards
effective for 2005.

The principal adjustments in changing from the Group's existing accounting
practices to IFRS are in the following standards:
     
•    IFRS 2 - share based payments
•    IAS 16 - property, plant and equipment
•    IAS 12 - income taxes
•    IAS 17 - leases
•    IAS 39 - financial instruments



Summary Impact of IFRS on 2004 Results

                                   UK GAAP    IFRS1
                                        £m       £m   % Change Comment on principal changes
                                                             
Revenue                              225.3    225.3         0% No change
Operating Costs                       63.5     60.8        -4% IAS 17 Espoir Lease
Depletion and Amortisation            67.6     80.4       +19% IAS 17 Espoir lease,
                                                               IAS 12 Energy Africa tax gross up
                                                               IAS 16 component depreciation: Gawain
Operating Profit                      67.5     56.8       -16% Additional depreciation
Profit after tax                      32.9     31.3        -5% Negative Gawain depreciation offset  by
                                                               PRT charge reduction
Cashflow from operating              154.3    154.3         0% No change
activities
Net assets                           379.1    375.5        -1% Negative Gawain depreciation offset  by
                                                               PRT charge reduction
                                     pence    pence
Earnings per share                    6.18     5.88
Diluted earnings per share            6.11     5.81
Dividend per share                    1.75     1.75



1.  Excludes the impact of IAS 32 and IAS 39, which will be adopted
prospectively from 1 January 2005.



Presentation on IFRS Transition

To complement this announcement, a presentation on the IFRS transition, hosted
by Tom Hickey, Chief Financial Officer, and Julian Tedder, Group Finance
Manager, will be held at 09:30 (BST) on Wednesday 24 August 2005 at Citigate
Dewe Rogerson's offices, 3rd Floor, 3 London Wall Buildings, London Wall,
London, EC2M 5SY.

For those unable to attend the presentation, there will be a conference call at
16:00 (BST) on Wednesday 24 August 2005.  For UK and European participants
please call [phone] and request to be connected to the Tullow Oil
teleconference.  For US participants please call [phone].

A replay facility will be available from one hour after the conference call.
Please call [phone] (UK and European) or [phone] (US),
access code: 3545963.

For further information on the Group and the IFRS transition, please refer to
our website at www.tullowoil.com



Contact Us

If you have any questions on this announcement or regarding the presentation
please contact:


Tullow Oil plc            Citigate Dewe Rogerson              Murray Consultants
([phone])        ([phone])                  ([phone])
Tom Hickey                Martin Jackson                      Joe Murray
Julian Tedder
Chris Perry


1. Introduction

The Council of the European Union announced in June 2002 that listed companies
in Europe would be required to adopt International Financial Reporting Standards
(IFRS) for accounting periods beginning on or after 1 January 2005. In line with
this requirement, the Group will adopt IFRS as its accounting basis from the
beginning of 2005. The adoption of IFRS will be first reflected in the Group's
financial statements for the six months ended 30 June 2005.

This news release sets out how the adoption of IFRS affects the 2004 results and
the financial position of the Group previously reported under UK GAAP. This
document includes:
     
•    A summary and explanation of the adjustments arising from IFRS
•    Details of the basis of preparation of the financial statements under IFRS
•    IFRS consolidated financial information (income statement, balance sheet 
     and cashflow statement) for the year ended 31 December 2004 excluding the
     impact of IAS 32 and IAS 39
•    IFRS consolidated financial information for the six months ended 30 June 
     2004 excluding the impact of IAS 32 and IAS 39
•    IFRS consolidated balance sheet as at 1 January 2004, the opening balance 
     sheet, excluding the impact of IAS 32 and IAS 39
•    Accounting Policies under IFRS

The IFRS consolidated balance sheet as at 1 January 2004 and the financial
information for the year ended 31 December 2004 have been audited by Deloitte &
Touche LLP and the financial information for the six months ended 30 June 2004
has been reviewed by Deloitte & Touche LLP. The audit reports and review
reports, addressed to the Directors of Tullow, are published herewith.


2. Analysis of Key Impacts of IFRS on Group Results

IFRS 2 - Share Based Payments

Tullow is committed to allowing employees the opportunity to participate in the
ongoing growth and success of the Company and since 1988 has operated a variety
of Share-based schemes including an Executive Share Option Scheme and, more
recently an Employee Share Incentive Plan. Under UK GAAP no adjustment was made
to the financial statements when options were granted as under the 1988, 1998
and 2000 Executive Share Option Schemes the options were granted at market
value. Adjustments were made to the financial statements only when the options
were exercised.

IFRS 2 requires such share based payments by the Group to employees to be fair
valued at grant date using an option pricing model and charged through the
income statement over the vesting period of the relevant awards. The accounting
change has reduced profit by £0.33 million in the year ended 31 December 2004
and by £0.17 million in the six months ended 30 June 2004.

While all charges to date have been associated with the Group's various share
option schemes as outlined above, future charges under this heading will also be
influenced by awards made under the Performance Share Plan (PSP) approved by
shareholders on 29 June 2005. To date, conditional awards covering a total of
1,784,417 shares have been made under the PSP. Further awards under the PSP,
along with any awards under Share Option Schemes, will influence the charge for
future periods.

IAS 12 - Income Taxes

Business Combinations

IAS 12 requires that deferred tax is recognised on temporary differences arising
on acquisitions that are categorised as business combinations. Business
combinations are defined as the bringing together of separate entities or
businesses into one reporting entity. Deferred tax is recognised at acquisition
as part of the assessment of the fair value of assets and liabilities acquired
and is provided on balances previously excluded from provision under UK GAAP
such as fair value revaluations of intangible and tangible fixed assets.

The acquisition of Energy Africa in May 2004, which is considered a business
combination under IFRS 3 - Business Combinations, gives rise to fair value
adjustments. Accordingly, the Group has recognised an additional deferred tax
liability of £49.3 million in respect of these temporary differences as at 31
December 2004. The fair values assigned to non-current assets were increased by
a corresponding amount.

Any deferred tax provision will unwind through the consolidated income statement
as the underlying temporary difference is reversed. The net impact from the
recognition of additional temporary differences on acquisitions is to increase
profit after tax by £0.02 million for the year ended 31 December 2004. There is
no change in the profit after tax in the six months ended 30 June 2004.

IFRS 1 allows exemptions from the application of certain IFRSs, and accordingly
business combinations prior to 1 January 2004 have not been restated. Similarly,
the acquisition of the Schooner and Ketch fields completed in March 2005 is not
classified as a business combination and accordingly there are no fair value
adjustments to which this requirement of IAS 12 would apply.

Petroleum Revenue Tax (PRT)

Under UK GAAP there is no definitive guidance on the accounting treatment for
PRT. Historically the Group has charged PRT due on chargeable field profits as a
tax expense in the income statement. In addition, deferred PRT was charged as a
tax expense so as to allocate the expected PRT cost over the remaining life of
the related field on a unit of production basis

using commercial reserves. The resulting asset or liability was included in the
balance sheet under debtors or provisions as appropriate. Tullow's charges in
respect of PRT arise from the Murdoch, Murdoch K and Orwell fields in the
Southern North Sea.

Under IFRS, PRT is treated as an income tax under IAS 12 and deferred PRT
accounted for on a temporary difference basis. The effect of this revision is to
more closely correlate the charge to PRT in any period to field profitability.
This has no impact on the economics of any asset or the total life of field PRT
charge. The overall PRT charge, net of deferred corporation tax, for the year
ended 31 December 2004 has decreased by £3.3 million and similarly the PRT
charge for the six months ended 30 June 2004 has decreased by £1.0 million.

IAS 16 - Property, Plant and Equipment

Under UK GAAP the Group applied the 'successful efforts' accounting policy which
required all costs associated with unsuccessful exploration and pre-licence
costs to be written off to the Profit and Loss Account. This is consistent with
IFRS 6 - Exploration for and Evaluation of Mineral Resources and so no
adjustments are required.

Under UK GAAP the Group's oil and gas properties were depreciated with reference
to the aggregate production and reserves of the fields of which they are
considered to form a part (the UOP method). A field was defined, in accordance
with the UK Statement of Recommended Practice (SORP) as an area consisting of a
single reservoir or multiple reservoirs all grouped on or related to the same
individual geological structural feature and/or stratigraphic condition.

Under IAS 16 each part of an item of property, plant and equipment with a cost
that is significant in relation to the total cost of the item shall be
depreciated separately. Consequently certain fields and related infrastructure
are required to be analysed into components and the related assets depreciated,
using the UOP method over the reserves that the assets specifically serve. This
has particular implications for the depreciation of satellite fields and
facilities which have a useful life materially different to that of the
infrastructure through which they are produced. Accordingly, an adjustment to
depreciation has been made to reflect the useful life of the Gawain field and
associated facilities on a standalone basis following a revised estimate of
ultimate recoverable reserves during 2003. The overall effect of this adjustment
is to increase the depreciation charge, net of deferred tax, by £4.6 million in
the year ended 31 December 2004 and by £2.5 million in the six months ended 30
June 2004.

IAS 17 - Leases

All leasing arrangements have been reviewed against the criteria of IAS 17 -
Leases to determine whether the leases are operating or finance in nature. Under
UK GAAP a finance lease is a lease that transfers substantially all the risks
and rewards of ownership of an asset to the lessee. A transfer of risks and
rewards occurs if at the inception of a lease the present value of the minimum
lease payments, including any initial payment, amounts to substantially all
(normally 90 per cent or more) of the fair value of the leased asset.

In Cote d'Ivoire the Espoir Field partners, including Tullow, have entered into
an agreement covering the use of the 'Espoir Ivorienne' FPSO until 2011.  While
this arrangement did not fall to be treated as a finance lease under UK GAAP,
IAS 17 imposes additional conditions which mean that the FPSO is classified as a
finance lease by reference to the following specific criteria in IAS 17:
     
•    At the inception of the lease the present value of the minimum lease
     payments amounts to at least substantially all of the fair value of the 
     leased asset

•    The leased assets are of a specialised nature such that only the lessee can 
     use them without major modifications being made

Tullow also utilises an FPSO as part of its participation in the Ceiba field in
Equatorial Guinea. This vessel is not covered by either IAS 17 or SSAP 21 as it
has been purchased by the Joint Venture partners.

Accordingly, at 31 December 2004, fixed assets with a net book value of £14.8
million have been recognised, together with £15.0 million of finance lease
liabilities, of which £1.9 million has been classified as repayable within one
year.

The income statement for the year has been restated as follows:
     
•    A reduction in operating costs of £2.7 million as under UK GAAP operating 
     lease payments were treated as a cost of sale
     
•    An increase in the depreciation charge of £2.2 million, reflecting  the 
     depreciation charge on the asset recognised under IFRS
     
•    An increase in interest payable of interest payable of £0.5 million, which 
     reflects the interest element of the lease payments.

IAS 39 - Financial Instruments

IAS 39 'Financial Instruments: Recognition and Measurement' has not been adopted
for 2004, and therefore this section is outside the scope of Deloitte & Touch
LLP's audit and review reports which apply solely to the 2004 financial
information.

IAS 39 covers the treatment of financial instruments, which includes many
commodity contracts which qualify as derivatives under this standard.  IAS 39
requires fair value accounting in relation to financial instruments, including
derivatives, with limited exceptions.  Most notably, contracts qualifying for '
own use' treatment are exempted from the standard and may continue to be
recognised under the accrual method of accounting.

The first time application of IAS 39 is complex. The Group has made use of the
transition provision of IFRS 1 for first time adopters of the IAS 39 standard
which allows the Group to adopt the standard prospectively with effect from 1
January 2005, and therefore the attached financial statements exclude the impact
of IAS 39.

Consideration of the application of the standard has been most focused on the
two following areas:

1) Commodity derivatives for both oil and gas

The Group holds a portfolio of commodity derivative contracts, with various
counterparties, covering both its underlying oil and gas businesses. Under IAS
39 all derivatives must be recognised at fair value on the balance sheet with
changes in fair value between accounting periods recognised in the income
statement unless cash flow hedge accounting is applied. In future external
reporting, the impact of the fair value adjustments will be disclosed separately
in the statutory accounts.

The Group's unaudited commodity derivative gross fair values are as follows:

Unaudited                                            1 January 2005             30 June 2005
                                                                 £m                       £m

Oil commodity derivatives                                   (£30.4)                 (£114.9)
Gas commodity derivatives                                     (1.1)                   (26.4)
Total derivative (liability)                                (£31.5)                 (£141.3)


A large portion of the derivative liabilities at 1 January 2005 and 30 June 2005
relate to contracts acquired as part of the acquisition of Energy Africa in May
2004; these contracts cover 4,000 bopd at a maximum Brent Dated price of $29.30/
barrel extending to 31 December 2009.

From 1 January 2005, the Group's commodity derivatives are classified as cash
flow hedges under IAS 39. As a result, the effective portion of hedging gains or
losses as a result of changes in the fair values of designated hedging
instruments is deferred in a separate component of reserves subject to the
establishment of a 'highly effective' correlation (defined in IAS 39 as hedge
effectiveness within a range of 80-125%) between the commodity hedge and the
underlying physical commodity's pricing and sale characteristics.  Hedge
ineffectiveness is recognised directly in the income statement.

It is likely that there will be a degree of ineffectiveness inherent in the
Group's oil hedges arising from, among other factors, the Brent crude discount
on the Group's underlying West African crude relative to Brent. We are currently
evaluating the extent of this hedge ineffectiveness.

2) Long term gas contracts

The Group holds a number of long term gas contracts, with varying contractual
terms, which have been have been acquired during the Group's expansion in the
UKCS. The contracts generally require the delivery of specified physical volumes
of gas to gas buyers at prices which are subject to annual review, in
conjunction with certain indices.

As at 1 January 2005 the Group held two long term gas contracts with British Gas
Trading Ltd (covering certain Thames area fields) and one long term gas contract
with Powergen plc (a gas supply agreement). We have concluded that such long
term contracts, held by the group as at 1 January 2005, meet the own use
exemption and will continue to be accrual accounted since each of the contracts
results in the physical delivery of contracted volumes to the buyer, and are not
otherwise settled net.

On 31 March 2005 the Group completed the acquisition of the Schooner/Ketch
interests, including two long term gas contracts with RWE NPower plc. These
contracts cover 30 mmscfd until October 2004, reducing to 24 mmscfd thereafter
until maturity in October 2007, and are at a price of approximately 17p/therm.
We are continuing to evaluate these contracts and, while we initially believe
that these contracts may qualify for the own use exemption from the standard,
there is a possibility that volumetric flexibility inherent in the contracts may
preclude the application of accrual accounting. In this case the fair value of
these contracts may require to be recognised on the balance sheet with changes
in fair value between accounting periods recognised in the income statement.

In addition the Group also holds a number of shorter term gas contracts which
oblige the Group to deliver specified physical volumes of gas in the future at
fixed prices. However, these shorter term gas contracts meet the meet the own
use exemption and will continue to be accrual accounted.

3. Basis of Preparation

The consolidated financial information for the six months ended 30 June 2004 and
the year ended 31 December 2004 and the opening balance sheet at 1 January 2004
have been prepared in accordance with International Financial Reporting
Standards (IFRS) for the first-time. The rules for first-time adoption of IFRS
are set out in IFRS 1 - First-time adoption of International Financial Reporting
Standards. IFRS 1 states that a company should use the same accounting policies
in its opening balance sheet and throughout all periods presented in its first
IFRS financial statements. The Standard requires these policies to comply with
IFRSs effective at the reporting date of the first published financial
statements (31 December 2005) under IFRS.

The International Standards adopted by the Group are subject to ongoing review
and endorsement by the EU and possible amendment by interpretive guidance from
the International Financial reporting Interpretations Committee (IFRIC) and the
accounting profession. The IFRS information presented in this document has been
prepared on the basis of current interpretations of standards.

Where the Group's UK GAAP financial information was based on estimates, the same
estimates have been applied in preparing the IFRS financial information. Where
IFRS requires estimates that were not previously required under UK GAAP, they
have been based only on those factors existing on the relevant balance sheet
date. This is consistent with treating information received after the balance
sheet date as non adjusting events under IAS 10 - Events after the Balance Sheet
Date. Estimates not previously required under UK GAAP primarily relate to
financial instruments, embedded derivatives and share based payments.

IFRS 1 allows exemptions from the application of certain IFRSs to assist
companies with the transition process. Accordingly the Group has made the
following first time accounting policy choices:
     
•    IFRS 2 - Share Based Payments is applied to all share based rewards made 
     after 7 November 2002 that did not vest before 1 January 2005

•    IFRS 3 - Business combinations prior to 1 January 2004 have not been
     restated

•    IAS 32 - Financial Instruments: Disclosure and Presentation and IAS 39 - 
     Financial Instruments: Recognition and Measurement will be applied
     prospectively from 1 January 2005 and as such the 2004 restated information
     presented excludes adjustments required on adoption of these Standards

The Group, as a first time adopter, has adopted early the following Standard
that is not mandatory as at 31 December 2005, the reporting date of the Group's
first IFRS financial statements.

The following Standard has been adopted with effect from 1 January 2004:
     
•    IFRS 6 - Exploration for and Evaluation of Mineral Resources. The Standard 
     does not impact the Group's existing policy for exploration and evaluation 
     expenditure

The financial statements have been prepared under the historical cost
convention.


4.1 Group Financial Information Restated for IFRS

Consolidated Financial Information for the year ended 31 December 2004

Group Income Statement
                                         UK GAAP*      IFRS 2      IAS 12      IAS 16      IAS 17              IFRS
                                             2004                                                              2004
                                            £'000       £'000       £'000       £'000       £'000             £'000

 Revenue                                  225 256                                                           225 256
 Cost of sales                          (131 071)                 (2 989)     (7 669)         501         (141 228)

 Gross profit                              94 185           -     (2 989)     (7 669)         501            84 028

 Administrative expenses                 (10 370)       (556)                                              (10 926)
 Profit on sale of licence interest         2 292                                                             2 292
 Exploration cost written off            (17 961)                                                          (17 961)
 Other expenses                            ( 647)                                                             (647)

 Operating Profit                          67 499       (556)     (2 989)     (7 669)         501            56 786

 Interest receivable                        3 458                                                             3 458
 Finance costs                           (12 960)                                           (489)          (13 449)

 Profit before tax                         57 997       (556)     (2 989)     (7 669)          12            46 795

 Income tax expense                      (25 048)         222       6 298       3 068                      (15 460)

 Profit for the period                     32 949       (334)       3 309     (4 601)          12            31 335

 Dividend Paid                            (6 995)                                                           (6 995)
Retained Profit attributable to            25 954       (334)       3 309     (4 601)          12            24 340
Equity Holders


 Earnings per Ordinary Share                Stg p       Stg p       Stg p       Stg p       Stg p             Stg p
  - Basic                                    6.18      (0.06)        0.62      (0.86)        0.00              5.88
  - Diluted                                  6.11      (0.06)        0.61      (0.85)        0.00              5.81

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.




4.2 Group Financial Information Restated for IFRS

Consolidated Financial Information for the year ended 31 December 2004

Group Balance Sheet
                                           UK GAAP*      IFRS 2      IAS 12      IAS 16      IAS 17          IFRS
                                               2004                                                          2004
                                              £'000       £'000       £'000       £'000       £'000         £'000
 ASSETS
 Non-current assets
 Property, plant and equipment              495 920                  48 628    (13 805)      14 784       545 527
 Intangible assets                          103 312                     632                               103 944
 Investments                                    496                                                           496
                                            599 728           -      49 260    (13 805)      14 784       649 967
 Current assets
 Inventories                                  3 392                                                         3 392
 Trade receivables                           37 156                                                        37 156
 Other current assets                        17 051                                                        17 051
 Cash and cash equivalents                   85 070                                                        85 070
                                            142 669           -           -           -           -       142 669

 Total assets                               742 397           -      49 260    (13 805)      14 784       792 636

 EQUITY AND LIABILITIES
 Equity attributable to equity
holders  of the parent
 Called up share capital                     64 537                                                        64 537
 Share premium                              121 656                                                       121 656
 Other reserves                             148 591                                                       148 591
 Retained earnings                           44 300         260       4 595     (8 283)       (189)        40 683
 Total equity                               379 084         260       4 595     (8 283)       (189)       375 467

 Non-current liabilities
 Obligations under finance leases                 -                                          13 014        13 014
 Long-term borrowings                       143 398                                                       143 398
 Deferred tax liabilities                    29 920       (260)      44 665     (5 522)                    68 803
 Long-term provisions                        70 679                                                        70 679
 Total non-current liabilities              243 997       (260)      44 665     (5 522)      13 014       295 894

 Current liabilities
 Trade and other payables                   100 655                                           1 959       102 614
 Short-term borrowings                        1 552                                                         1 552
Current portion of long-term                  3 750                                                         3 750
borrowings
 Current tax payable                         13 359                                                        13 359
 Total current liabilities                  119 316           -           -           -       1 959       121 275

 Total liabilities                          363 313       (260)      44 665     (5 522)      14 973       417 169

 Total equity and liabilities               742 397           -      49 260    (13 805)      14 784       792 636

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.


4.3 Group Financial Information Restated for IFRS

Consolidated Financial Information for the year ended 31 December 2004

Group Cashflow Statement
                                           UK GAAP*      IFRS 2     IAS 12     IAS 16     IAS 17              IFRS
                                               2004                                                           2004
                                              £'000       £'000      £'000      £'000      £'000             £'000
Cash flows from operating activities
Cash generated from operations              154 307                                                        154 307
Income taxes paid                          (14 497)                                                       (14 497)
Net cash from operating activities          139 810                                                        139 810

Cash flows from investing activities
Acquisition of subsidiary Energy          (166 055)                                                      (166 055)
Africa, net of cash acquired
Disposal of subsidiary                        4 730                                                          4 730
Purchase of property, plant and               (132)                                                          (132)
equipment
Purchase of Oil and Gas assets             (94 973)                                                       (94 973)
Interest received                             3 436                                                          3 436
Net cash used in investing activities     (252 994)                                                      (252 994)

Cash flows from financing activities
Net proceeds from issue of share            120 913                                                        120 913
capital
Debt arrangement fees                       (3 050)                                                        (3 050)
Repayment of existing bank loans           (33 437)                                                       (33 437)
Drawdown of bank loan                        98 620                                                         98 620
Repayment of bank loans acquired           (33 824)                                                       (33 824)
Interest paid                               (9 494)                                                        (9 494)
Dividends paid                              (6 995)                                                        (6 995)
 Net cash used in financing                 132 733                                                        132 733
activities

                                              £'000       £'000      £'000      £'000      £'000             £'000
Net increase in cash and cash                19 549                                                         19 549
equivalents
Cash and cash equivalents at                 65 631                                                         65 631
beginning of period
Translation Difference                        (110)                                                          (110)
Cash and cash equivalents at end of          85 070                                                         85 070
period**

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.

** Includes restricted amounts of £36.2 million (2003 - £29.8 million) in
respect of decommissioning reserves on fixed term deposits and £10.1 million
(2003 - £10.4 million) held on deposit in connection with expected future
repayments under the Borrowing Base facility.


5.1 Group Financial Information Restated for IFRS

Consolidated Financial Information for the six months ended 30 June 2004

Group Income Statement
                                           UK GAAP*      IFRS 2      IAS 12      IAS 16      IAS 17          IFRS
                                           30.06.04                                                      30.06.04
                                              £'000       £'000       £'000       £'000       £'000         £'000

 Revenue                                     76 533                                                        76 533
 Cost of sales                             (42 136)                   (842)     (4 186)         252      (46 912)

 Gross profit                                34 397           -       (842)     (4 186)         252        29 621

 Administrative expenses                    (3 238)       (278)                                           (3 516)
 Exploration Costs Written Off              (4 430)                                                       (4 430)
 Other expenses                               (218)                                                         (218)
 Operating Profit                            26 511       (278)       (842)     (4 186)         252        21 457

 Interest receivable                          1 407                                                         1 407
 Finance costs                              (5 279)                                           (250)       (5 529)

 Profit before tax                           22 639       (278)       (842)     (4 186)           2        17 335

 Income tax expense                        (12 637)         111       1 854       1 674                   (8 998)

 Profit for the period                       10 002       (167)       1 012     (2 512)           2         8 337

 Dividend Paid                                  -

 Retained Profit attributable to             10 002       (167)       1 012     (2 512)           2         8 337
Equity Holders


 Earnings per Ordinary Share                  Stg p       Stg p       Stg p       Stg p       Stg p         Stg p
  - Basic                                      2.37      (0.04)        0.24      (0.59)        0.00          1.98
  - Diluted                                    2.34      (0.04)        0.24      (0.59)        0.00          1.95

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.


5.2 Group Financial Information Restated for IFRS

Consolidated Financial Information for the six months ended 30 June 2004

Group Balance Sheet
                                           UK GAAP*      IFRS 2      IAS 12        IAS 16      IAS 17        IFRS
                                           30.06.04                                                      30.06.04
 ASSETS                                       £'000       £'000       £'000         £'000       £'000       £'000
 Non-current assets
 Property, plant and equipment              481 366                  54 610      (10 322)      16 884     542 538
 Other intangible assets                    121 199                     672                               121 871
 Investments                                    496                                                           496
                                            603 061           -      55 282      (10 322)      16 884     664 905
 Current assets
 Inventories                                  1 453                                                         1 453
 Trade receivables                           21 637                                                        21 637
 Other current assets                        34 818                                                        34 818
 Cash and cash equivalents                  113 431                                                       113 431
                                            171 339           -           -             -           -     171 339

 Total assets                               774 400           -      55 282      (10 322)      16 884     836 244

 EQUITY AND LIABILITIES
 Equity attributable to equity
holders of the parent
 Share capital                               64 156                                                        64 156
 Share premium                              120 230                                                       120 230
 Other reserves                             168 232                                                       168 232
 Retained earnings                           28 348         149       2 298       (6 193)       (200)      24 402
 Total equity                               380 966         149       2 298       (6 193)       (200)     377 020

 Non-current liabilities
 Obligation under finance leases                  -                                            14 932      14 932
 Long-term borrowings                       169 296                                                       169 296
 Deferred tax                                27 482       (149)      52 984       (4 129)                  76 188
 Long-term provisions                        80 442                                                        80 442
 Total non-current liabilities              277 220       (149)      52 984       (4 129)      14 932     340 858

 Current liabilities
 Trade and other payables                    75 072                                             2 152      77 224
 Short-term borrowings                        2 489                                                         2 489
 Current portion of long-term                23 100                                                        23 100
borrowings
 Current tax payable                         15 553                                                        15 553
 Total current liabilities                  116 214           -           -             -       2 152     118 366

 Total liabilities                          393 434       (149)      52 984       (4 129)      17 084     459 224

 Total equity and liabilities               774 400           -      55 282      (10 322)      16 884     836 244

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.




5.3 Group Financial Information Restated for IFRS

Consolidated Financial Information for the six months ended 30 June 2004

Group Cashflow Statement
                                           UK GAAP*      IFRS 2      IAS 12      IAS 16      IAS 17          IFRS
                                               2004                                                          2004
                                              £'000       £'000       £'000       £'000       £'000         £'000
Cash flows from operating activities

Cash generated from operations               57 526                                                        57 526
Income taxes paid                           (6 206)                                                       (6 206)
 Net cash from operating activities          51 320                                                        51 320

Cash flows from investing activities
Acquisition of subsidiary Energy          (166 384)                                                     (166 384)
Africa, net of cash acquired
Purchase of property, plant and                (59)                                                          (59)
equipment
Purchase of Oil & Gas Assets               (27 907)                                                      (27 907)
Interest received                             1 407                                                         1 407
Net cash used in investing activities     (192 943)                                                     (192 943)

Cash flows from financing activities
Net Proceeds from issue of share            116 661                                                       116 661
capital
Debt arrangement Fees                       (2 864)                                                       (2 864)
Repayment of existing loans                (33 313)                                                      (33 313)
Drawdown of bank loan                       145 327                                                       145 327
Repayment of bank loans acquired           (32 922)                                                      (32 922)
Interest paid                               (3 283)                                                       (3 283)
Dividends paid                                    -                                                             -
Net cash used in financing activities       189 606                                                       189 606

                                              £'000       £'000       £'000       £'000       £'000         £'000
Net increase in cash and cash                47 983                                                        47 983
equivalents
Cash and cash equivalents at                 65 631                                                        65 631
beginning of period
Translation Difference                        (183)                                                         (183)
Cash and cash equivalents at end of         113 431                                                       113 431
period **

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.

** Includes restricted amounts of £36.9 million (2003 - £29.8 million) in
respect of decommissioning reserves on fixed term deposits and £10.6 million
(2003 - £10.4 million) held on deposit in connection with expected future
repayments under the Borrowing Base facility.




6. Group Financial Information Restated for IFRS

Consolidated Financial Information for as at 1 January 2004

Group Balance Sheet
                                           UK GAAP*      IFRS 2      IAS 12      IAS 16      IAS 17          IFRS
                                           01.01.04                                                      01.01.04
ASSETS                                        £'000       £'000       £'000       £'000       £'000         £'000
Non-current assets
Property, plant and equipment               144 333                             (6 137)      18 306       156 502
Other intangible assets                      48 434                                                        48 434
Investments                                     496                                                           496
                                            193 263           -           -     (6 137)      18 306       205 432
Current assets
Inventories                                     437                                                           437
Trade receivables                            14 092                                                        14 092
Other current assets                         12 024                                 898                    12 922
Cash and cash equivalents                    65 631                                                        65 631
                                             92 184           -           -         898           -        93 082

Total assets                                285 447           -           -     (5 239)      18 306       298 514

EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital                                37 784                                                        37 784
Share premium                                14 198                                                        14 198
Other reserves                               45 593                                                        45 593
Retained earnings                            18 346          38       1 286     (3 682)       (201)        15 787
Total equity                                115 921          38       1 286     (3 682)       (201)       113 362

Non-current liabilities
Obligations under finance leases                  -                                          16 222        16 222
Long-term borrowings                         59 458                                                        59 458
Deferred tax                                  2 881        (38)     (1 286)     (1 557)                         -
Long-term provisions                         47 524                                                        47 524
Total non-current liabilities               109 863        (38)     (1 286)     (1 557)      16 222       123 204

Current liabilities
Trade and other payables                     29 121                                           2 285        31 406
Short-term borrowings                        12 689                                                        12 689
Current portion of long-term                 13 800                                                        13 800
borrowings
Current tax payable                           4 053                                                         4 053
Total current liabilities                    59 663           -           -           -       2 285        61 948

Total liabilities                           169 526        (38)     (1 286)     (1 557)      18 507       185 152

Total equity and liabilities                285 447           -           -     (5 239)      18 306       298 514

* The UK GAAP column represents the numbers previously reported, however the
presentation has been amended to comply with IAS 1.


7. Accounting Policies

The accounting policies set out below have been adopted to prepare the 2004
financial information under International Financial Reporting Standards (IFRSs)
restated results. These will be the principal accounting policies used for
Tullow's future financial statements prepared under IFRS.
     
(a)  Basis of Accounting

The financial information has been prepared under the historical cost convention
and using accounting policies consistent with IFRSs.
     
(b)  Basis of Consolidation

The consolidated financial statements consist of the financial statements of the
Company and all its subsidiary undertakings. All intra-group transactions,
balances, income and expenses are eliminated on consolidation.

Turnover and results of subsidiary undertakings are consolidated in the Group
Income Statement from the dates on which control over the operating and
financial decisions is obtained.

Acquisitions

On an acquisition that qualifies as a business combination, the assets and
liabilities of a subsidiary are measured at their fair value as at the date of
acquisition. Any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. Any deficiency of
the cost of acquisition below the fair values of the identifiable net assets
acquired is credited to the Income Statement in the period of acquisition.

Joint Ventures

The Group is engaged in oil and gas exploration, development and production
through unincorporated joint ventures.  The Group accounts for its share of the
results and net assets of these joint ventures as jointly controlled assets.  In
addition, where Tullow acts as operator to the joint venture, the gross
liabilities and receivables (including amounts due to or from non-operating
partners) of the joint venture are included in the Group consolidated Balance
Sheet.
          
(c)  Revenue

Revenue represents the sales value, net of VAT and overriding royalties, of the
Group's share of production in the year together with tariff income.

Revenues received under take-or-pay sales contracts in respect of undelivered
volumes are accounted for as deferred income. Revenue is recognised when goods
are delivered and title has passed.

(d)  Over/Underlift

Lifting or offtake arrangements for oil and gas produced in certain of the
Group's jointly owned operations are such that each participant may not receive
and sell its precise share of the overall production in each period.  The
resulting imbalance between cumulative entitlement and cumulative production
less stock is 'underlift' or 'overlift'.  Underlift and overlift are valued at
market value and included within debtors and creditors respectively.  Movements
during an accounting period are adjusted through Cost of Sales such that Gross
Profit is recognised on an entitlements basis. The Group's share of any physical
stock is accounted for at the lower of cost and net realisable value.

(e)  Foreign Currencies

The Pound Sterling is the presentation currency of the Group.  Financial
statements of foreign currency denominated subsidiaries are translated into
Sterling whereby the results of the overseas operations are generally translated
at the average rate of exchange for the year and their balance sheets at rates
of exchange ruling at the Balance Sheet date.  Currency translation adjustments
arising on the restatement of opening net assets of foreign subsidiaries,
together with differences between the subsidiaries' results translated at
average rates versus closing rates, are taken directly to reserves. All
resulting exchange differences are classified as equity until disposal of the
subsidiary. On disposal the cumulative amounts of the exchange differences are
recognised as income or expense.

Transactions in foreign currencies are recorded at the rates of exchange ruling
at the transaction dates. Monetary assets and liabilities are translated into
Sterling at the exchange rate ruling at the Balance Sheet date, with a
corresponding charge or credit to the Income Statement. However, exchange gains
and losses arising on long-term foreign currency borrowings, which are a hedge
against the Group's overseas investments, are dealt with in reserves.

(f)  Exploration, Evaluation and Production Assets

The Group adopts the successful efforts method of accounting for exploration and
appraisal costs. All licence acquisition, exploration and evaluation costs are
initially capitalised in cost centres by well, field or exploration area, as
appropriate. Directly attributable administration costs and interest payable are
capitalised insofar as they relate to specific exploration and development
activities.  Pre-licence costs are expenses in the period they are incurred.

These costs are then written off unless commercial reserves have been
established or the determination process has not been completed and there are no
indications of impairment.

All field development costs are capitalised as property, plant and equipment.
Property, plant and equipment related to production activities are amortised in
accordance with the Group's Depletion and Amortisation accounting policy.
          
(g)  Commercial Reserves

Commercial reserves are proven and probable oil and gas reserves, which are
defined as the estimated quantities of crude oil, natural gas and natural gas
liquids which geological, geophysical and engineering data demonstrate with a
specified degree of certainty to be recoverable in future years from known
reservoirs and which are considered commercially producible. There should be a
50 per cent statistical probability that the actual quantity of recoverable
reserves will be more than the amount estimated as a proven and probable
reserves and a 50 per cent statistical probability that it will be less.

(h)  Depletion and Amortisation - Discovery Fields

All expenditure carried within each field is amortised from the commencement of
production, on a unit of production basis, which is the ratio of oil and gas
production in the period to the estimated quantities of commercial reserves at
the end of the period plus the production in the period, on a field-by-field
basis. Costs used in the unit of production calculation comprise the net book
value of capitalised costs plus the estimated future field development costs.
Changes in the estimates of commercial reserves or future field development
costs are dealt with prospectively.

Where there has been a change in economic conditions that indicates a possible
impairment in a discovery field, the recoverability of the net book value
relating to that field is assessed by comparison with the estimated discounted
future cash flows based on management's expectations of future oil and gas
prices and future costs. Any impairment identified is charged to the Income
Statement as additional depreciation, depletion and amortisation. Where
conditions giving rise to impairment subsequently reverse, the effect of the
impairment charge is also reversed as a credit to the Income Statement, net of
any depreciation that would have been charged since the impairment.

(i)  Decommissioning

Provision for decommissioning is recognised in full when the related facilities
are installed. A corresponding amount equivalent to the provision is also
recognised as part of the cost of the related property, plant and equipment. The
amount recognised is the estimated cost of decommissioning, discounted to its
net present value and is reassessed each year in accordance with local
conditions and requirements. Changes in the estimated timing of decommissioning
or decommissioning cost estimates are dealt with prospectively by recording an
adjustment to the provision, and a corresponding adjustment to property, plant
and equipment. The unwinding of the discount on the decommissioning provision is
included as an interest expense.

(j)  Property, Plant and Equipment
     
Property, plant and equipment is stated in the Balance Sheet at cost less
accumulated depreciation. Depreciation on property, plant and equipment other
than exploration and production assets, is provided at rates calculated to write
off the cost less estimated residual value of each asset on a straight line
basis over its expected useful economic life of between three and five years.
     
(k)  Finance Costs and Debt

Borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

Finance costs of debt are allocated to periods over the term of the related debt
at a constant rate on the carrying amount. Arrangement fees and issue costs are
deducted from the debt proceeds and are amortised and charged to the Income
Statement as finance costs over the term of the debt.
     
(l)  Share Issue Expenses and Share Premium Account

Costs of share issues are written off against the premium arising on the issues
of share capital.

(m)  Taxation

Current and deferred tax, including UK corporation tax and overseas corporation
tax, are provided at amounts expected to be paid using the tax rates and laws
that have been enacted or substantially enacted by the Balance Sheet date.

Deferred corporation taxation is recognised on all temporary differences that
have originated but not reversed at the Balance Sheet date where transactions or
events that result in an obligation to pay more, or right to pay less tax in the
future have occurred at balance sheet date. Deferred tax assets are recognised
only to the extent that it is considered more likely than not that there will be
suitable taxable profits from which the underlying temporary differences can be
deducted. Deferred tax is measured on a non-discounted basis.

Deferred tax is provided on temporary differences arising on acquisitions that
are categorised as Business Combinations. Deferred tax is recognised at
acquisition as part of the assessment of the fair value of assets and
liabilities acquired. Any deferred tax is charged or credited in the income
statement as the underlying temporary difference is reversed.

Petroleum Revenue Tax (PRT) is treated as an income tax and deferred PRT is
accounted for under the temporary difference method. Current UK PRT is charged
as a tax expense on chargeable field profits included in the Income Statement
and is deductible for UK corporation tax.
     
(n)  Pensions

Contributions to the Group's defined contribution pension schemes are charged to
operating profit on an accruals basis.
     
(o)  Derivative Financial Instruments (up to 31 December 2004)

The Group uses derivative financial instruments to manage its exposure to
fluctuations in foreign exchange rates, interest rates and movements in oil and
gas prices.

Premiums paid to enter into such derivative financial instruments are charged to
the income statement over the period of the hedge. Payments and receipts arising
under the financial instruments are recognised in turnover in the same periods
as the hedged transactions.

Fair value assigned to out-of-money derivative financial instruments acquired in
a business acquisition are included as other creditors and released from the
balance sheet as the hedges are settled.

The Group does not hold or issue derivative financial instruments for
speculative purposes and it is the Group's policy that no trading in financial
instruments shall be undertaken.
     
(p)  Leases

Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases and are charged to the Income
Statement on a straight-line basis over the term of the lease.

Assets held under finance leases are recognised as assets of the group at their
fair value or, if lower, at the present value of the minimum lease payments,
each determined at the inception of the lease. The corresponding liability to
the lessor is included in the Balance Sheet as a finance lease obligation. Lease
payments are apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are charged directly against income, unless
they are directly attributable to qualifying assets, in which case they are
capitalised in accordance with the group's general policy on borrowing costs.

(q)  Share Based Payments

The Group has applied the requirements of IFRS 2 Share-based Payments. In
accordance with the transitional provisions, IFRS 2 has been applied to all
grants of equity instruments after 7 November 2002 that were unvested as of 1
January 2005.

The Group issues equity-settled and cash-settled share-based payments to certain
employees. Equity-settled share-based payments are measured at fair value at the
date of grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting
period, based on the group's estimate of shares that will eventually vest.

Fair value is measured by use of an actuarial binomial model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.

For cash-settled share-based payments, a liability is recognised based on the
current fair value determined at each Balance Sheet date and that portion of the
employees' services to which the payment relates that has been received by the
Balance Sheet date.


8. Independent Auditors' report to the Board of Directors of Tullow Oil plc on
the preliminary comparative IFRS financial information

We have audited the preliminary comparative IFRS financial information of Tullow
Oil plc for the year ended 31 December 2004 which comprises the consolidated
balance sheet, income statement and cash flow statement and the Basis of
Preparation statement in Section 3, the Accounting Policies in Section 7 and the
related notes in Section 2 except in relation to IAS 39.

This report is made solely to the Board of Directors, in accordance with our
engagement letter engagement dated 27 July 2005 and solely for the purpose of
assisting with the transition to IFRS.  Our audit work will be undertaken so
that we might state to the company's board of directors those matters we are
required to state to them in an auditors' report and for no other purpose.  To
the fullest extent permitted by law, we will not accept or assume responsibility
to anyone other than the company for our audit work, for our report, or for the
opinions we have formed.

Respective responsibilities of directors and auditors

The company's directors are responsible for ensuring that the Company and the
Group maintains proper accounting records and for the preparation of the
preliminary comparative IFRS financial information on the basis set out in the
Basis of Preparation statement in Section 3, which describes how IFRS will be
applied under IFRS 1, including the assumptions the directors have made about
the standards and interpretations expected to be effective, and the policies
expected to be adopted, when the company prepares its first complete set of IFRS
financial statements as at December 31, 2005. Our responsibility is to audit the
preliminary comparative financial information in accordance with relevant United
Kingdom legal and regulatory requirements and auditing standards and report to
you our opinion as to whether the preliminary comparative IFRS financial
information is prepared, in all material respects, on the basis set out in
Section 3.

We read the other information contained in the preliminary comparative IFRS
financial information for the above year as described in the contents section
and consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the preliminary comparative IFRS
financial information.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom auditing standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the preliminary
comparative IFRS financial information. It also includes an assessment of the
significant estimates and judgments made by the directors in the preparation of
the preliminary comparative IFRS financial information and of whether the
accounting policies are appropriate to the circumstances of the group,
consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the preliminary
comparative IFRS financial information is free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion,
we also evaluated the overall adequacy of the presentation of information in the
preliminary comparative IFRS financial information.

Without qualifying our opinion, we draw attention to the fact that to Section 3
explains why there is a possibility that the accompanying preliminary
comparative IFRS comparative financial information may require adjustment before
constituting the final comparative IFRS financial information.  Moreover, we
draw attention to the fact that, under IFRSs, only a complete set of financial
statements comprising a balance sheet, income statement, statement of changes in
equity, cash flow statement, together with comparative financial information and
explanatory notes, can provide a fair presentation of the company's financial
position, results of operations and cash flows in accordance with IFRSs.

Opinion

In our opinion the preliminary comparative IFRS financial information is
prepared, in all material respects, on the basis set out in Section 3 which
describes how IFRS will be applied under IFRS 1, including the assumptions the
directors have made about the standards and interpretations expected to be
effective, and the policies expected to be adopted, when the company prepares
its first complete set of IFRS financial statements as at December 31, 2005.

Deloitte & Touche LLP
Chartered Accountants
London
22 August 2005


9. Independent Review Report to the Board of Directors of Tullow Oil plc on the
Preliminary Comparative Financial Information for the Six Months Ended 30 June
2004

We have reviewed the accompanying preliminary International Financial Reporting
Standards (IFRS) consolidated financial information of Tullow Oil Plc ('the
Company') and its subsidiaries (together, 'the Group') for the six months ended
30 June 2004 which comprises the consolidated income statement, the consolidated
balance sheet, the consolidated cash flow statement and the Basis of Preparation
statement in Section 3, the Accounting Policies in Section 7 and the related
notes in Section 2 except in relation to IAS 39 (hereinafter referred to as '
preliminary financial information').

This preliminary financial information is the responsibility of the Company's
directors.  It has been prepared as part of the Company's conversion to IFRS in
accordance with the basis set out in the Basis of Preparation statement in
Section 3 which describes how IFRSs have been applied under IFRS 1, including
the assumptions the directors have made about the standards and interpretations
expected to be effective, and the policies expected to be adopted, when the
company prepares its first complete set of IFRS financial statements as at 31
December 2005. Our responsibility is to express an opinion on this preliminary
IFRS comparative financial information based on our review.

Our review report is made solely to the Company in accordance with Bulletin 1999
/4 issued by the Auditing Practices Board. Our work has been undertaken so that
we might state to the Company those matters we are required to state to them in
an independent review report and for no other purpose.  To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company, for our review work, for this report, or for the conclusions we
have formed.

Review work performed

We conducted our review in accordance with Bulletin 1999/4 issued by the
Auditing Practices Board. A review consists principally of making enquiries of
management and applying analytical procedures to the preliminary financial
information and underlying financial data and, assessing whether the accounting
policies and presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests of control and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit performed in accordance with United Kingdom auditing
standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an opinion on the preliminary financial
information.

Emphasis of matter

Without modifying our review conclusion, we draw attention to the fact that
Section 3 explains why there is a possibility that the accompanying preliminary
financial information may require adjustment before constituting the final IFRS
comparative information for the six months ended 30 June 2004.  Moreover, we
draw attention to the fact that, under IFRSs, only a complete set of financial
statements comprising an income statement, balance sheet, statement of changes
in equity, cash flow statement, together with comparative financial information
and explanatory notes, can provide a fair presentation of the Group's financial
position, results of operations and cash flows in accordance with IFRSs.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the preliminary financial information for the six months ended
30 June 2004 which has been prepared in accordance with the basis set out in
Section 3.


Deloitte & Touche LLP
Chartered Accountants
London
22 August 2005


10. Independent Auditors' Report to the Board of Directors of Tullow Oil plc on
the Preliminary Opening IFRS Balance Sheet

We have audited the preliminary opening IFRS balance sheet of Tullow Oil plc for
the year ended 31 December 2004 and the Basis of Preparation statement in
Section 3, the Accounting Policies in Section 7 and the related notes in Section
2 except in relation to IAS 39.

This report is made solely to the Board of Directors, in accordance with our
engagement letter engagement dated 27 July 2005 and solely for the purpose of
assisting with the transition to IFRS.  Our audit work will be undertaken so
that we might state to the company's board of directors those matters we are
required to state to them in an auditors' report and for no other purpose.  To
the fullest extent permitted by law, we will not accept or assume responsibility
to anyone other than the company for our audit work, for our report, or for the
opinions we have formed.

Respective responsibilities of directors and auditors

The company's directors are responsible for ensuring that the Company and the
Group maintains proper accounting records and for the preparation of the
preliminary opening IFRS balance sheet on the basis set out in Basis of
Preparation statement in Section 3, which describes how IFRS will be applied
under IFRS 1, including the assumptions the directors have made about the
standards and interpretations expected to be effective, and the policies
expected to be adopted, when the company prepares its first complete set of IFRS
financial statements as at December 31, 2005. Our responsibility is to audit the
preliminary comparative financial information in accordance with relevant United
Kingdom legal and regulatory requirements and auditing standards and report to
you our opinion as to whether the preliminary comparative IFRS financial
information is prepared, in all material respects, on the basis set out in
Section 3.

We read the other information presented with the preliminary opening IFRS
balance sheet for the above year and consider the implications for our report if
we become aware of any apparent misstatements or material inconsistencies with
the preliminary opening IFRS balance sheet.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom auditing standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the preliminary
comparative IFRS financial information. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the preliminary opening IFRS balance sheet and of whether the accounting
policies are appropriate to the circumstances of the group, consistently applied
and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the preliminary
comparative IFRS financial information is free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion,
we also evaluated the overall adequacy of the presentation of information in the
preliminary opening IFRS balance sheet.

Without qualifying our opinion, we draw attention to the fact that Section 3
explains why there is a possibility that the accompanying preliminary opening
IFRS balance sheet may require adjustment before constituting the final opening
IFRS balance sheet.  Moreover, we draw attention to the fact that, under IFRSs,
only a complete set of financial statements comprising a balance sheet, income
statement, statement of changes in equity, cash flow statement, together with
comparative financial information and explanatory notes, can provide a fair
presentation of the company's financial position, results of operations and cash
flows in accordance with IFRSs.
    
Opinion

In our opinion the preliminary opening IFRS balance sheet is prepared, in all
material respects, on the basis set out in Section 3 which describes how IFRS
will be applied under IFRS 1, including the assumptions the directors have made
about the standards and interpretations expected to be effective, and the
policies expected to be adopted, when the company prepares its first complete
set of IFRS financial statements as at December 31, 2005.

Deloitte & Touche LLP
Chartered Accountants
London
22 August 2005




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